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LOS ANGELES-Maguire Properties has formed a special committee to consider selling the Downtown L.A.-based REIT and has released former prospective buyers from standstill agreements. Maguire, which has been under pressure from a major shareholder to sell or take other steps to boost shareholder value, says that the special committee will focus on strategic alternatives for achieving shareholder value “including possible sale of the company.”

The special committee is composed of independent directors Walter L. Weisman, Lawrence S. Kaplan and George A. Vandeman, with Weisman as chairman. Weisman is a past chairman and chief executive officer of American Medical International Inc., Kaplan is a retired Ernst & Young partner who headed that firm’s REIT advisory services group and Vandeman is a retired Amgen SVP and general counsel who heads his own private investment firm.

In addition to forming the committee and releasing the standstill agreements, Maguire has amended the company’s bylaws to reduce the advance notice required to submit director nominations and other proposals for action at an annual shareholders meeting to 60 days from its previous 90 days. According to Weisman, the special committee will “look at all reasonable strategic alternatives” that serve the goal of enhancing shareholder value.

However, Weisman says, “We are prepared to wait if the time and opportunity are not right.”

He says that changing the advance notice period for shareholders to submit proposals at annual meetings will reduce potential disruption of the special committee’s efforts and will “help foster an atmosphere supporting full and fair bids.” The special committee will work with Morgan Stanley & Co. as financial adviser and Skadden, Arps, Slate, Meagher & Flom LLP as its legal adviser.

Maguire’s formation of the special committee follows about a month after Century City-based JMB Capital Partners announced that it had acquired a 5.2% stake in Maguire and asked Downtown L.A.-based Maguire to consider selling out. JMB sent a letter to Maguire founder Rob Maguire asking for Maguire to create an independent committee of the board to “evaluate strategic alternatives.” Voiding all current standstill arrangements with prospective buyers was one of the suggestions in JMB’s letter.

According to a recent SEC filing by JMB, the Century City firm has since raised its stake in Maguire to more than 6.3%, or approximately 2.9 million shares of the REIT’s stock, which it has acquired for approximately $76.8 million. The original filing by JMB cited various analyses that pegged the value of Maguire shares at prices ranging from $33 to $46, compared with the mid-$20 range where the stock has been trading. Maguire’s stock was trading above $28 this morning, up $3 per share.

The letter to Maguire from JMB, whose managing member is Jonathan Brooks, credited Maguire for assembling a topnotch portfolio of class A office buildings but said that Maguire’s shares are substantially underpriced because the value of the underlying buildings that the REIT owns is greater than its market capitalization. JMB listed a number of other reasons that Maguire’s stock is trading below the asset value of the company, including “excessive general and administrative expenses” that it estimated to be approximately $20 million per year too high.

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